Gold Inches Toward $1300 Ahead Of Inflation Data

On Thursday, Donald Trump said North Korea should be "very, very nervous" if it acted against the US.

The Dow Jones was down 0.3% in opening trade, declining to 22,016.8 and the wider S&P 500 index dropped 0.48% to 2,463.18. Hong Kong slumped 2.04 per cent, Shanghai slipped 1.63 per cent, Korea shed 1.69 per cent, Jakarta fell 1.03 per cent. Singapore shares also ended in negative territory as increasingly bellicose talk between the United States and North Korea prompted investors to take money off the table, while traders trimmed positions ahead of the weekend.

"North Korea responding with a threat to US territory after Trump warned them not to threaten the USA was never going to go down well", Lawler said.

"Trump's comments about North Korea have created nervousness and the fear is if the President really means what he said: "fire and fury"," said Naeem Aslam, chief market analyst at Think Markets in London.

The yen is perceived as a safe haven because Japan is the world's biggest creditor country and investors there have tended to repatriate funds in times of crisis.

The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819.

In currency markets, the Canadian dollar was trading at an average price of 78.71 cents United States, down 0.20 of a USA cent.

U.S. producer prices unexpectedly recorded their biggest drop in almost a year, and the number of Americans filing for unemployment benefits unexpectedly rose last week.

US stocks closed slightly lower Wednesday, making up much of the ground they lost earlier following a rare batch of earnings disappointments by Walt Disney and other big companies. The next key data on focus will be tomorrow's CPI figures which should shed more light on the path of the U.S. inflation.

METALS: Gold added $10.80, or 0.8 percent, to settle at $1,290.10 an ounce.

Gold has risen to its highest level in nearly two months, while the Swiss franc has powered against the USA dollar and seen its biggest one-day gain against the euro in more than two and a half years.

In commodities, US. crude fell 0.67 per cent to $49.23 per barrel and Brent was last at $52.58, down 0.23 per cent on the day.

"Risk aversion is once again the name of the game.as geopolitical tensions mount and investors head for cover in the traditional safe havens", said Oanda analyst Craig Erlam. Since the beginning of 2017, the barometer index of the S&P 500 had only two sessions of declines of 1 % or more. The move added to escalating U.S.

US DATA: The other potential driver in markets will be upcoming USA economic data, including monthly inflation figures, which could go a long way to determining expectations for the pace at which the Federal Reserve raises interest rates. Panasonic was off 0.74 percent to sit at 1,475.5 yen.